If you live in the developed part of planet earth, you probably use credit cards. Shopping with a credit card feels so easy and painless. As behavioral economist Dan Ariely said in an interview I heard yesterday, you go into a store, you hand them a piece of plastic, and they give you that thing you want. Want the Williams Sonoma Star Wars Cupcake Decorating Set? It's all yours. Electric Garlic Roaster? Yours. Ariely says buying things makes you feel powerful. And buying them with plastic, makes you feel like you're getting them without really paying for them. Intellectually, you know you'll actually have to pay for them eventually, but you're not that intellectual.
My 21 month old daughter has only one time frame: NOW. Later, after and soon mean nothing to her, only NOW. This gives her great power. You will comply with her demand for your jewelry NOW or she will scream loudly NOW, and don't even think you can buy her off with promises of other things later. Adults, on the other hand, spend a tremendous amount of energy learning to live in the moment, but I'm pretty sure that the primitive part of the adult brain is still like my daughter's --- living in the eternal now, and when we hand over that credit card, I'm pretty sure we are thinking, "I don't have to pay for this (now)."
Give it to me or I'll scream.
But then inevitably, we get the bill, and we don't feel so good anymore. We judge ourselves for having bought that garlic roaster. Did we really need that Amish fireplace? We all know we should pay the credit card bills off in full every month, but sometimes we don't. Then we feel like our credit card is unhappy with us. We're letting the card down. If we were better people, we'd pay our credit card bills off in full (now) and avoid paying interest charges (later). But that would leave us with little or no money for other stuff right now. And what if the payment is due now, but arrives late? Then we're really in trouble! The card will punish us with a late fee, and possibly higher interest rates, further reinforcing our sense of shame and failure. The card can be so hard to please, and soon all the power that came from compelling a store clerk to hand something over to you is replaced by sinking feelings of weakness.
But guess what? You've got it all wrong! your creditors don't want your guilt. They don't need your apologies. Your creditors LOVE you! And they especially love you for your sins. If you can't resist buying stuff you might not need --- great! If you don't pay off your balance, even better! Remember? That's how they make money! What if you pay late? They make more money! And if you really screw up your credit score? They charge you a higher interest rate and make even MORE money! So relax, you are your creditor's BFF, and just like in any relationship, once you realize how important you are, you can start making demands.
I made a payment that hit one day late last month, so I called and told my credit card company they should waive the fee they had just charged me. I felt like a Jedi knight practicing mind control when the rep on the phone said, "Okay, no problem. And what ELSE can we do for you today?" Well, feeling emboldened by my first triumph, I decided to push my luck, and I told the customer service rep that I was a really great customer and that they should give me a lower interest rate. And ya know what they told me? They said they now AUTOMATICALLY review all accounts quarterly and if you've been paying your bills and behaving yourself, they will AUTOMATICALLY give you a better interest rate. Just like that! You don't even have to call them and tell them what a nice person you are.
Why are the creditors being so nice? Well, unless you enjoy reading about credit default swaps or suffer from insomnia, you probably haven't read the 2,319 page Dodd–Frank Wall Street Reform and Consumer Protection Act signed into law in 2010, but it turns out it contained some lovely little nuggets that benefit credit card customers by forcing the creditors to play nicer than they had in the past. And if they don't, you can always leave them, like jilted lovers with no future possibility of receiving your interest payments and late fees.
So even if you struggle with the concept of time, doesn't it feel good to know you hold enough power to be a demanding prima donna in the relationship with your creditors?
Of course, no matter how powerful you are, you'll still have to pay your bills. Unless you really think the world is going to end in 2012, in which case, don't worry about it.
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